Square, a company whose card reader plugs directly into mobile phones, has talked to Goldman Sachs and Morgan Stanley about going public next year, the WSJ reports. The company has annual net revenues of an estimated $110 million to $165 million, and expects to process $30 billion in purchases next year. That’s a big number in comparison to the $90 billion that mobile payments are expected to reach in 2017, but it’s minuscule compared to the volume MasterCard and Visa do annually: those two companies, which dominate the credit card market, together handle more than $5 trillion in purchases each year.

Square is also adding financial heft to its board in the form of former Goldman Sachs CFO David Viniar, who joined Square’s board of directors last month. Viniar is replacing Starbucks CEO Howard Schultz, who always planned to serve only a single year. Starbucks will remain Square’s largest customer. Schultz, according to market researcher Rick Oglesby, is the “key decision maker” on how and when to more widely roll out Square Wallet, the company’s mobile payment app aimed at consumers.

In June, Clinkle was the hot payments startup, and it raised a $25 million seed round to fund development of an electronic wallet app. But many e-wallets are already out there, and none of them has caught on. Felix dug into the reasons why mobile payments haven’t taken off, including the simple fact that they’re often just harder to use than a card (although Square Cash is making some inroads on this front). The problem, a consultant specializing in payments told Dan Rowinski, is that “the general inertia, and lack of traction in the emerging payments market within North America, is not something that one solves with a better market strategy and a mobile app”.

To address that problem, Dwolla is aiming for a much more radical re-engineering of the financial electronic infrastructure. The Verge’s Ben Popper writes that Dwolla, in the words of former CFPB official Mark Egerman, is trying to build “a whole new set of rails for moving money”. Moving beyond credit card networks and ACH, the system that handles huge volumes of routine payments, however, isn’t easy. The company’s challenge is somewhat analogous to the challenge of building a popular social network. The Dwolla network, Popper writes, “has to reach a large number of merchants and consumers before it’s valuable enough to exist in isolation from the traditional banking and credit system”. PayPal is the only company to do that so far. And no, don’t even mention Bitcoin. - Ben Walsh

On to today’s links:

Alpha“It is likely that you will witness another Dow Jones crash of greater than 35% at some time during your life” – Josh Brown